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London's FTSE 100 logs best day in two months as banks surge

Devik Jain and Shreyashi Sanyal
·2-min read
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain
FILE PHOTO: The London Stock Exchange Group offices are seen in the City of London, Britain

By Devik Jain and Shreyashi Sanyal

(Reuters) - London's FTSE 100 scored its biggest one-day percentage gain in nearly two months on Tuesday, getting a boost from banks on rising bets of more stimulus measures to soften the economic blow from a new wave of coronavirus infections.

The blue-chip index closed up 2.3% as banks jumped 4.7% to their highest in nearly three months.

The mid-cap FTSE 250 rose 1.8%, with shares in Crest Nicholson Holdings Plc surging 16.5% after the homebuilder forecast annual profit ahead of market expectations and reinstated its dividend.

The wider homebuilding sub-index gained 1.9%.

UK shares have made a strong start to November after ending October with their biggest monthly decline since the coronavirus-fuelled crash in March, with traders counting on more monetary and fiscal measures to support businesses impacted by a new round of nationwide lockdowns.

At its policy meeting on Nov. 5, the Bank of England is expected to ramp up its bond-buying programme.

Focus this week is also on the U.S. presidential election, with Democrat contender Joe Biden leading Republican President Donald Trump in national opinion polls, but the race looked close in key battleground states.

"Anticipating a blue wave (Democrat victory), the markets went all in on a green tsunami ... as the Western indices continued to aggressively rebound from their nightmarish end to October," said Connor Campbell, financial analyst at Spreadex in London.

British office space provider IWG jumped 8.2% after it said it had started seeing some improvement in its sales activity and highlighted increasing interest in flexible working.

G4S Plc rose 3.1% after the private security firm rejected a takeover proposal from U.S. rival Allied Universal Security Services.

Separately, the European Union and Britain have so far failed to reach agreement on three persistent sticking points in talks, both sides said, suggesting any breakthrough in securing a trade deal is still a way off.

(Reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Rashmi Aich and Mark Potter)